Vegoils commentary: CPO selling-through continues, CME soyoil plummets
Crude palm oil (CPO) futures prices in Malaysia slid on losses across the vegoil and energy complexes and profit-taking activities.
The most-active third-month CPO futures contract for June delivery on the Bursa Malaysia exchange (BMD) closed at 4,298 ringgit ($905) per tonne on Monday April 8, down by 45 ringgit per tonne, or 1%.
Chinese vegoil futures resumed trading significantly lower on Monday, with the most-active palm oil contract on the Dalian Commodity Exchange (DCE) down by 3.2% to close at 8,218 yuan ($1,159) per tonne, while the equivalent soybean oil contract moved up by 1.9% to 7,736 yuan per tonne.
The most-active rapeseed oil contract on the Zhengzhou Commodity Exchange (ZCE) also closed lower by 0.4% at 8,205 yuan per tonne.
Discussions in the physical market were lower, with offers of May-shipment olein on an FOB Indonesia basis down by $20 per tonne from Friday levels at $955 per tonne.
April shipments on a CFR India basis traded in a range of $1,027.50-1,040.00 per tonne.
Shipments on a CFR West Coast India basis remained at least around a $10 per tonne premium on the same month but on a CFR East Coast India basis.
However, demand in India has tapered off, with most buyers sufficiently restocked ahead of the Eid al-Fitr festivities this week.
In the Americas, soyoil futures plummeted on Monday tracking another session of losses in Malaysian palm oil and weaker crude prices.
The May contract at the Chicago Mercantile Exchange (CME) tumbled by 2% from Friday’s close, trading at 47.92 cents per lb at the time of publication.
This is the lowest level in over a week, with the market borrowing weakness from continued selling through on the Malaysian Palm oil market and softer crude prices.
WTI and Brent crude contracts dropped by around 1% on the day after surging over 6% through the previous seven sessions.
The slump in soyoil prices underpinned soymeal futures through product spreading dynamics, with the market supported further by strength in the Chinese soymeal market.
The May CME soymeal contract rose by 1.2% on the day to $337.10 per short ton at the time of publication.
In the physical market, South American soyoil premiums were somewhat mixed, with May positions softening by around 0.25 cents per lb from Friday’s level in both Brazil and Argentina.
Argentine bids for May loading were reported at a discount of 8.00 cents per lb, while in Brazil bids were disclosed at a 7.90 cents per lb discount against offers at discounts of 5.20 cents per lb, all under May CME futures.
Brazilian soymeal premiums plummeted by $3-5 per short ton across the curve, more than offsetting the rise in underlying futures.
The May basis fell by $3.50 per short ton from Friday’s level to a $0.50 per short ton premium to May CME contracts.
The Argentine soymeal market was more stable, with May premiums assessed at a $7.50 per short ton premium to underlying futures, up by $0.50 per short ton on the day.
The market for rapeseed and sunflower oils in European ports looked relatively stable on Monday, with minor adjustments.
Sunflower oil for loading in July/August/September was offered at $987.50 per tonne FOB against buyers’ ideas of $970.00 per tonne FOB, which is $10 per tonne higher than Friday’s level.
Rapeseed oil offers were heard on Monday at €940 ($1,019) per tonne FOB Rotterdam, loading in May/June/July, while buyers’ ideas were reported at €930 per tonne FOB Rotterdam in the same period.
Earlier in the day, Fastmarkets heard about a rapeseed oil trade with shipment in August/September/October at €927 per tonne FOB Rotterdam with subsequent bid increases.
Rapeseed oil for later shipment in November/December/January and February/March/April traded at €940 per tonne FOB Rotterdam.
The sunflower oil market was subdued on Monday in the Black Sea region due to the approaching end of Ramadan.
Offers of sunflower oil from Ukrainian sellers were received at $985 per tonne CIF India for delivery in April-May and $975 per tonne CIF India for delivery in May.
Spot levels at the ports continued to rise and were heard at $820 per tonne CPT Odesa and up to $830 per tonne CPT Pivdennyi.
Purchase prices for sunflower seeds in the central regions strengthened within the range of 15,000-16,000 hryvnia ($385-411) per tonne CPT crush plant, including value-added tax (VAT). Supply was minimal, with farmers focused on sowing.